As captives evolve from being an alternative risk solution to a mainstream tool, their value is increasingly recognized across the insurance landscape. Yet to secure captives’ long-term strategic advantages, a new mindset is needed. This article brings together four perspectives – captive owner, global insurer, broker, and regulator – on how to unlock captive opportunities in 2026 and beyond.
Today’s risk environment is more complex, interconnected, and unpredictable. What’s changed is not just the volume of risks – but how they interact and escalate. Organizations no longer confront isolated incidents. For example, a cyber-attack can trigger operational shutdowns, regulatory action and reputational damage – all at once.
We are seeing continued geopolitical instability, supply chain disruptions and rapid advancements in technologies and artificial intelligence, all of which are influencing risk environments across industries. Meanwhile, companies are also managing challenges related to ageing populations, political polarization, and unusual weather patterns.
The captive industry is designed to help organizations navigate uncertainty. As a result, more companies seem to be reassessing how they balance risk transfer and risk retention, exploring new ways to leverage their captives.
We are at what appears to be an inflection point for the global captive market. Captives are no longer seen as niche alternatives. They have gained prominence at boardroom level and now seem to play a critical role in risk financing, capital allocation, and volatility management. The most sophisticated captives are embedded in core business strategy, supporting long-term objectives rather than just short-term premium efficiencies.
As the insurance market continues to evolve through 2026, organizations are increasingly leveraging captives not just to navigate uncertainty, but to proactively shape risk responses and enhance resilience.
Unlocking strategy: discipline, governance and data
In property, there seems to be signs of stabilization. After several years of significant rate increases and recent mild catastrophe activity, capacity is selectively returning to certain market segments, fostering competitive dynamics.
However, the property market remains highly segmented. Climate-exposed regions, areas vulnerable to secondary perils like flood, wildfire, and wind, and locations with high concentrations of risk seem to continue to face pricing and programme structure pressures.
Casualty presents a different landscape. Ongoing challenges such as social inflation, nuclear verdicts, third-party litigation funding, significant regulatory changes and de-regulation and the long-tail nature of casualty exposures seem to keep premiums high. Limits, attachment points, coverage terms and capacity seem to be under constant scrutiny. Disciplined underwriting prevails, especially in segments or jurisdictions with adverse loss experience.
As strategic objectives evolve, captives seeking long-term advantage need a more tailored and forward-looking approach. Adriana Scherzinger, Group Head of Captives at Zurich Insurance Company Ltd. (“Zurich”), has identified common traits among captives intentionally structured for long-term value:
“The most successful captives we see are managed with discipline and intent,” she notes. She continues, they have a clearly defined purpose, a retention strategy aligned with the parent company’s risk appetites, and strategic use of reinsurance.
A notable market evolution is the broadening of captives’ scope – moving from single-line structures to multi-line programmes and covering non-traditional and emerging risks. Diversification is seen as key to value generation. Advanced analytics are enabling more creative capital deployment and risk financing structures.
Structured reinsurance solutions, designed to span multiple lines and years, can help captives smooth out the financial impact of losses over time. Rather than absorbing a significant impact in a single year, organizations may distribute losses across several years — often in conjunction with traditional insurance programmes. This approach can be effective in helping manage earnings volatility and supporting long-term planning.
Finally, captives that make smart use of data appear better positioned to achieve more reliable results, helping build deeper confidence within their parent company and across the (re)insurance market.
“The most effective captive programmes we’re seeing combine traditional insurance, alternative risk solutions and operational resilience in a single integrated approach,” notes Scherzinger.
How to position for success in 2026 and beyond: four perspectives
The captive owner: building on operational excellence
For Jo Mather, Insurance Director at Phillips 66, and President of the Texas Captive Insurance Association (TxCIA), captives should generally be viewed as a long-term strategic investment in terms of delivering successful results.
“Captives or protected cell programmes of any size demand rigorous due diligence to understand the long-term value, risks and capital commitment. If your primary focus is premium savings, and fast returns they are probably not the right solution,” says Mather.
At Phillips 66, captive programmes are built on a solid foundation of operational excellence, she says. This, coupled with an insurance programme designed around risk appetite and insurance market conditions allows the captive to maintain the optimal balance of risk retention and transfer.
Stress testing the design regularly using analytics and actuarial forecasts is also essential, Mather adds. Over the longer term captives can then be confident when considering diversification as a way of utilising the capital to deliver significant value throughout market cycles.
“If you diversify your captive programme in other less traditional ways, for example, employee benefits, you will benefit even when the market softens.”
Mather says that many owners demonstrated the value of their captives during challenging market conditions over recent years by absorbing layers of their property and excess casualty programmes.
“This enabled them to stabilise terms and pricing in the short term and provided leverage in renewal discussions. The insurance market understands that insureds who opt to retain more risk may never return to the market,” she says.
In her experience it was their disciplined approach to programme design, built over time, that allowed the captives to evolve “from being largely a means to access reinsurance to a trusted tool for optimizing risk transfer,” Mather explains.
Achieving board level buy-in is essential for captive expansion – a process that is getting easier. With captives no longer viewed as ‘alternative’ risk financing tools, directors are becoming more familiar and engaged in the benefits they can bring, she observes.
However, if the captive industry wants to continue to mature and succeed, it must address talent shortages, she notes. Her role as President of the Texas Captive Insurance Association has illuminated a shortage of experienced captive managers, regulators and specialists, with many organisations relying on a small number of long-tenured experts.
“Leading organisations in the industry are working hard to address this by strengthening their recruitment, development, succession and retention strategies and from my perspective it appears to be working,” she says.
The global broker: investing in analytics
Having a creative capital strategy backed by advanced analytics is becoming a key differentiator in today’s market, observes Ciaran Healy, CEO and Global Captives Leader at Aon.
Today, captives act as platforms to access, structure and deploy capital in new ways, he says, with increased use of structured reinsurance and parametric solutions to supplement traditional coverage.
“This elevates the captive beyond the traditional insurance dynamic and places it as a strategic platform to ensure the group has a sustainable and resilient approach to volatility management,” says Healy.
Greater use of analytics is essential – not only to understand the risk curve across lines, but to articulate captive value beyond the premium savings, he notes: “We are demonstrating how the captive can not only finance the risk curve, but help flatten it, in other words, to improve the risk.”
By way of example, he cites a Nordic multinational in a highly challenged sector which faced rising insurance costs and restricted coverage after sustained losses.
Using advanced analytics, Aon assessed risk behavior, aligned solutions to risk tolerance and identified alternative capital sources. The approach restructured captive usage, introduced new capital via the captive and repositioned partner carrier capacity.
“The result was reduced costs, expanded coverage and a more resilient, capital-efficient risk financing structure,” he explains.
The capital available for clients to construct bespoke risk financing outcomes is increasing, he notes: “This is good because it is needed, it helps organisations build more fit for purpose risk financing approaches and improve resiliency. The captive is often the lynchpin of these approaches.”
The global insurer: building strategic relationships
As captive programmes become more sophisticated, their relationships with fronting insurers appear to be shifting from a transactional, balance sheet function to a strategic risk relationship, observes Scherzinger.
Captive owners seem to be increasingly relying on fronting carriers not only to satisfy insurance, regulatory and financial requirements, but also to help provide the compliance infrastructure, financial strength, underwriting expertise and operational capabilities required for efficient policy administration and disciplined claims handling.
“The capabilities that matter most today are those that enable captives to operate with confidence and scalability in a volatile risk environment. In our view, the fronting carrier acts as an enabler of the captive’s strategy rather than simply a paper provider,” says Scherzinger.
She continues “This means providing strong international licensing and regulatory compliance support, alongside efficient policy administration, cash flow management and claims handling. It also requires robust data and reporting capabilities, together with the ability to deliver effective risk transfer and retrocession solutions.”
Zurich recently supported a large multinational expand its captive from conventional property and casualty risks to provide multiple lines including cyber reinsurance to its network of independent collaborators across the globe.
Because these network collaborators operated as separate legal entities, the arrangement required a fronting insurer to issue local policies and reinsure the risk back to the captive, creating a mutually beneficial setup: network collaborators gained essential cyber protection, Zurich maintained valuable relationships, and the captive diversified its portfolio and supported greater group-wide resilience.
“This example shows how fronting insurers can support captives to evolve from simple risk retention vehicles into more strategic tools that can help transform risks into opportunity and may support the achievement of wider business goals,” says Scherzinger.
The regulator: driving credibility and innovation
A fast-evolving global regulatory landscape is supporting captives’ growing role as strategic tools for risk and capital management.
Jurisdictions that successfully balance oversight and compliance with flexibility and innovation may help to serve the dual purpose of boosting captive credibility and attracting captive formations.
The last few years have seen the emergence of new domiciles, with France implementing captive-friendly tax and accounting rules in 2023 and the UK currently developing a captive-friendly regulatory regime which it plans to launch next year.
Meanwhile Oklahoma is an example of a jurisdiction that has positioned itself as an attractive and business-friendly domicile for captive insurance companies in the US. According to industry data, since the introduction of captive legislation in 2013, the jurisdiction has experienced steady growth in its captive portfolio.
Between 2022 and 2025, the number of licensed captives increased by 64%, while premiums grew by 114% over the same period. “As the use of captive insurers grows, the quality of regulatory regimes is critical,” observes Steve Kinion, Captive Insurance Director at Oklahoma Insurance Department.
Today, regulators understand the need to be responsive to captive owners: “Captive insurance domiciles are continuously seeking to improve their laws and regulations. However, my experience is that captive owners and managers migrate to domiciles where they know and trust the regulators,” says Kinion.
Regulators are seeking to foster innovation through the development of protected cell companies that offer flexible, cost-efficient legal structures that appeal to mid-size companies. For example, Oklahoma is considering methods to substantially change the protected cell laws to make PCCs more flexible and predictable.
“These statutory changes are important because protected cells is one of the significant growth areas within captive insurance,” comments Kinion.
However, as captive domiciles grow in number and size, the supply of experienced regulators is not keeping pace with demand, he warns: “It is not just the laws of a captive domicile that matter; moreover, it is the experience and quality of the regulators who enforce the laws.”
Conclusion: captive outlook
Looking ahead to the rest of 2026 and beyond, captives are expected to take on a pivotal role – within both the insurance market and enterprise decision-making.
The global captive market in 2026 is at a defining moment, transitioning from an alternative risk solution to a core strategic asset for organisations. As the complexity and unpredictability of risks grow, captives are being leveraged not just to manage uncertainty, but to actively shape enterprise risk strategies and drive resilience.
Success in this evolving landscape requires a disciplined approach – anchored in strong governance, data-driven decision-making, and a clear long-term vision. Diversification, advanced analytics, and strategic collaboration are proving essential for captives to deliver sustainable value and support organisational objectives.
As regulatory frameworks advance and new domiciles emerge, the quality and expertise of captive management and oversight will become even more critical. Forward-looking organisations are investing in talent, innovation, and operational excellence to unlock the full potential of their captive programmes.
Looking ahead, captives will continue to expand their influence across risk financing, capital allocation, and strategic decision-making – helping businesses achieve greater stability, flexibility, and control. Those prepared to embrace this strategic shift are well positioned to capture new opportunities and build resilience for the future.